Sprint weighs joining merger fray with a bid for MetroPCS
NEW YORK — Sprint Nextel is considering making a rival bid for MetroPCS Communications, which agreed Wednesday to a merger with T-Mobile USA, according to people familiar with the situation.
Sprint is deciding whether to go public with a bid for MetroPCS, or to wait until the T-Mobile-MetroPCS deal is complete and then bid for the combined company, one of the sources said Thursday.
Sprint, the No. 3 U.S. wireless carrier, declined to comment. Analysts and bankers have been expecting a fresh round of consolidation in the competitive wireless industry since AT&T Inc’s bid to buy T-Mobile USA collapsed late last year.
The market is dominated by No. 2 provider AT&T and its bigger rival Verizon, with Sprint and T-Mobile trailing far behind in third and fourth place, respectively.
Both smaller companies have been losing customers as they have had trouble competing with bigger and even smaller rivals such as MetroPCS and Leap Wireless, which target the market’s fastest growing segment — cost-conscious customers who pay for calls in advance and don’t commit to long-term contracts.
In February, Sprint came close to buying MetroPCS, but backed out at the last minute, according to sources familiar with the matter. Sprint’s board rejected the $8 billion deal, which would have included debt, just hours before the companies were set to make an announcement, the sources said.
At the time, the board did not want Sprint to spend the money on the deal when the company needed resources for a costly network upgrade, sources said.
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